US non-farm payroll gains accelerate in October, earnings at nine-year high

October may have been a dire month for the US jobs markets, but one would not have guessed it from looking at the latest monthly non-farm payrolls report.

According to the US Department of Labor, non-farm payrolls accelerated last month to reach a pace of 250,000, comfortably exceeding economists' forecasts for a gain of 200,000.

More important, in parallel average hourly gains picked-up to a year-on-year clip of 3.1% following the advance of 2.8% seen during the month before, surpassing the 3.0% mark for the first time since 2009.

As well, the labour force participation rate increased by two tenths of a percentage point to 62.9%, a development which will likely please policymakers.

On that point, and possibly of quite some significance, Mickey Levy at Berenberg Capital Markets said: "This encouraging rise in labor force participation for the prime working-age cohort since 2016 has been a key factor that has led us to upgrade our estimates of longer-run potential growth (“Rising U.S. prime working-age labor participation”, September 20, 2018).

"The employment-population ratio for the prime working-age cohort, which moves closely with wages, rose by 0.4pp to 79.7%."

To take note of, the Department of Labor said hurricane Michael had no "discernible" impact on estimates of employment and unemployment.

Combined, upwards and downwards revisions to the jobs data corresponding to the previous two months, respectively, netted out.

By sectors, hiring in goods-producing industries picked-up from 42,000 for the month of September to 67,000 in October, while in services hiring increased from 79,000 to 179,000.

The length of the average work week also increased, from 34.4 hours to 34.5, while the rate of unemployment was unchanged from the month before at 3.7%.